{"investigation":{"slug":"nomad","entity_name":"Nomad","trust_score":10,"severity_base":null,"score_modifier":0,"confidence":0.92,"status":"published","content_type":"investigation","summary":"Nomad was a cross-chain messaging bridge operated by Illusory Systems, Inc. that suffered one of the largest DeFi exploits in history on August 1–2, 2022, when a smart contract initialization bug allowed approximately $190 million in user funds to be drained in a chaotic free-for-all involving over 300 wallet addresses. The protocol never recovered meaningful user adoption after a December 2022 relaunch, faced a class action lawsuit and an FTC enforcement action, and in December 2025 agreed to a settlement requiring repayment of $37.5 million to affected users.","sections":[{"content":"Nomad was a cross-chain interoperability protocol designed to allow users to transfer cryptocurrency tokens between disparate blockchains using an optimistic verification model. The protocol was developed and operated by Illusory Systems, Inc., a Delaware corporation incorporated on November 10, 2021, with co-founders Pranay Mohan (CEO) and James Prestwich (CTO). Nomad had raised venture funding and positioned itself as a security-first bridge, publicly claiming it employed every available tool to protect user funds. The protocol established a partnership with Connext to accelerate adoption of trustless cross-chain communication. Prior to the August 2022 exploit, the system received a security audit from Quantstamp in May and June 2022, with a final report delivered on June 9, 2022. That audit identified 40 issues; Quantstamp's report noted that the Nomad team had 'misunderstood' at least one input-validation finding. Critically, the specific buggy code responsible for the eventual exploit was introduced into the codebase after the audit had commenced, meaning the deployed contract differed from the version Quantstamp reviewed — a condition security researchers have termed 'audit drift.'","heading":"Background","sources":[{"url":"https://www.classaction.org/news/nomad-crypto-bridge-class-action-says-simple-programmer-mistake-allowed-186m-hack-in-2022","name":"","type":"other","credibility":3},{"url":"https://www.zellic.io/blog/audit-drift/","name":"","type":"other","credibility":3},{"url":"https://medium.com/nomad-xyz-blog/nomad-bridge-hack-root-cause-analysis-875ad2e5aacd","name":"","type":"other","credibility":3},{"url":"https://www.crunchbase.com/organization/illusory-systems-inc","name":"","type":"other","credibility":3}],"severity":"medium"},{"content":"On June 21, 2022, a routine upgrade to Nomad's Replica smart contract introduced a critical vulnerability: the contract's trusted Merkle root was initialized to the zero value (0x00). Because 0x00 also serves as the default value for unproven messages in the contract's storage mapping, the initialization caused the process() function to treat any message referencing that root as automatically proven — regardless of whether a legitimate Merkle proof existed. The flaw went undetected until August 1, 2022, when an initial attacker discovered they could craft a transaction calling process() directly with the zero root, substitute any recipient address, and withdraw funds that did not belong to them. No specialized smart contract knowledge was required beyond the ability to copy and modify existing transaction calldata. Once the first successful drain transaction was broadcast on-chain and visible in the public mempool, the exploit became immediately replicable by anyone. Within hours, a free-for-all looting event ensued: according to The Block, more than 300 wallet addresses participated. Coinbase's incident analysis determined that approximately 88 percent of participating addresses were copycats who simply replicated the initial attacker's calldata with their own withdrawal addresses. These copycats together accounted for roughly $88 million of the total stolen. TechCrunch and CNN Business reported on the chaotic nature of the event contemporaneously. The total funds drained were approximately $190 million, making it the fourth largest DeFi exploit in history at the time. Plaintiffs in a subsequent class action alleged that Nomad ignored obvious signs the attack was ongoing and failed to shut the bridge down in a timely manner.","heading":"The Chaotic Exploit","sources":[{"url":"https://www.theblock.co/post/160851/nomads-190-million-bridge-exploit-drew-hacking-feeding-frenzy-of-300-addresses","name":"","type":"other","credibility":3},{"url":"https://www.coindesk.com/tech/2022/08/11/copycats-stole-88m-during-nomad-exploit-by-copying-attackers-code-coinbase","name":"","type":"other","credibility":3},{"url":"https://techcrunch.com/2022/08/02/nomad-chaotic-exploit-crypto/","name":"","type":"other","credibility":3},{"url":"https://edition.cnn.com/2022/08/03/tech/crypto-bridge-hack-nomad","name":"","type":"other","credibility":3},{"url":"https://medium.com/immunefi/hack-analysis-nomad-bridge-august-2022-5aa63d53814a","name":"","type":"other","credibility":3},{"url":"https://www.halborn.com/blog/post/explained-the-nomad-hack-august-2022","name":"","type":"other","credibility":3}],"severity":"medium"},{"content":"Mandiant (Google Cloud) conducted a detailed post-compromise blockchain forensic analysis of the Nomad exploit using CryptoVoyant software. The analysis identified four distinct attacker clusters among the addresses that each stole more than $2 million. Group A (three addresses) stole approximately $18.8 million collectively; one address returned 77.6 percent of its haul to Nomad's recovery address, while the other two returned only 1.7 percent and 3.4 percent respectively. Group B (two addresses) stole approximately $4 million and laundered funds through 1inch and Tornado Cash; one address in this group was also linked to the April 2022 Rari Capital exploit, indicating a repeat offender with prior bridge exploitation experience. Group C (multiple addresses) stole approximately $5.2 million and laundered through Uniswap and Tornado Cash. Group D, assessed by Mandiant with high confidence as a single coordinated actor or group, stole approximately $54.5 million — roughly 29 percent of the total. Group D laundered funds through Uniswap, Curve, and OrionPool, then routed portions through Tornado Cash and into two deposit addresses holding roughly $50 million at the time of analysis. TRM Labs tracked subsequent laundering activity attributed to the primary suspect, Alexander Gurevich, including chain-hopping across multiple blockchains, use of Tornado Cash, conversion to privacy coins (Monero and Dash), and movement through offshore accounts and shell companies. The Coinbase incident analysis confirmed the 88 percent copycat figure and documented the breadth of address participation.","heading":"On-Chain Evidence","sources":[{"url":"https://cloud.google.com/blog/topics/threat-intelligence/dissecting-nomad-bridge-hack","name":"","type":"other","credibility":3},{"url":"https://www.trmlabs.com/resources/blog/key-suspect-in-190m-nomad-bridge-exploit-extradited-to-the-united-states","name":"","type":"other","credibility":3},{"url":"https://www.coinbase.com/es-es/blog/nomad-bridge-incident-analysis","name":"","type":"other","credibility":3}],"severity":"medium"},{"content":"Within days of the exploit, Nomad announced a bounty program offering any attacker the ability to retain 10 percent of drained funds and receive legal immunity in exchange for returning 90 percent to the company's designated recovery address. Nomad stated it would not pursue legal action against any party qualifying as a 'white hat' under these terms and offered a commemorative NFT as acknowledgment. By mid-August 2022, more than 40 wallet addresses had returned funds totaling over $36 million to the recovery address, comprising USDC, USDT, WBTC, DAI, ETH, and other ERC-20 tokens. This represented roughly 19 percent of the total amount stolen. Nomad relaunched its bridge in December 2022 to allow users to withdraw remaining bridged assets, but the relaunch attracted minimal user activity; observers reported the relaunched bridge held less than $1 million in deposits at various points in 2023 and 2024. A class action lawsuit, Singh v. Illusory Systems, Inc. (D. Del., 1:23-cv-00183), was filed by affected users asserting RICO and negligence claims. The federal district court dismissed the RICO claims and most negligence claims but allowed a fraud claim to proceed. In December 2025, the Federal Trade Commission announced a proposed consent order requiring Illusory Systems to repay approximately $37.5 million to affected users within one year of the agreement's signing, implement a comprehensive information security program, designate an employee to oversee that program, and undergo regular third-party security assessments. The FTC alleged that Illusory Systems had misrepresented its security posture while failing to adopt secure coding practices, vulnerability management, and adequate incident response capabilities. The settlement was pending final FTC vote and public comment as of the date of this report. Separately, Alexander Gurevich, a Russian-Israeli dual national, was arrested by Israeli authorities at Ben-Gurion Airport in May 2025 while allegedly attempting to flee to Russia under a changed legal name ('Alexander Block'). A federal grand jury in the Northern District of California had indicted Gurevich on August 16, 2023 on eight counts including wire fraud, conspiracy, and money laundering. The United States formally requested extradition in December 2024. If convicted on all counts, Gurevich faces up to 20 years in prison.","heading":"Recovery Efforts","sources":[{"url":"https://www.cnbc.com/2022/08/05/crypto-startup-nomad-offers-10percent-bounty-after-190-million-hack.html","name":"","type":"other","credibility":3},{"url":"https://cryptonews.com/news/over-usd-36m-returned-nomad-bridges-fund-recovery-address.htm","name":"","type":"other","credibility":3},{"url":"https://blockchain.bakermckenzie.com/2024/04/08/u-s-court-dismisses-rico-lawsuit-brought-in-connection-with-nomad-bridge-hack/","name":"","type":"other","credibility":3},{"url":"https://www.theregister.com/2025/12/17/nomad_ftc_settlement/","name":"","type":"other","credibility":3},{"url":"https://www.insideprivacy.com/united-states/federal-trade-commission/ftc-announces-10-year-information-security-consent-orders-with-illuminate-education-and-illusory-systems/","name":"","type":"other","credibility":3},{"url":"https://www.federalregister.gov/documents/2025/12/19/2025-23407/illusory-systems-inc-analysis-of-proposed-consent-order-to-aid-public-comment","name":"","type":"other","credibility":3},{"url":"https://www.bleepingcomputer.com/news/legal/israel-arrests-new-suspect-behind-nomad-bridge-190m-crypto-hack/","name":"","type":"other","credibility":3},{"url":"https://www.dlnews.com/articles/defi/hacker-behind-190m-nomad-bridge-exploit-arrested-in-israel/","name":"","type":"other","credibility":3}],"severity":"medium"},{"content":"Nomad (Illusory Systems, Inc.) presents an extreme risk profile for users. The protocol lost approximately $190 million in user funds in a single exploit event attributable to inadequate pre-deployment testing and insufficient security processes. Only approximately $36–37.5 million (roughly 19 percent) was recovered through voluntary returns and the FTC-mandated repayment obligation. The bridge has been effectively non-operational since the hack, with negligible TVL reported by observers through 2023 and 2024. The protocol faces active regulatory enforcement (FTC consent order, December 2025) and unresolved civil litigation (fraud claim in Singh v. Illusory Systems). At least one suspected primary attacker faces criminal prosecution in the United States. The FTC found that the company misrepresented its security posture to users while failing to implement basic coding, vulnerability management, and incident response standards. The Quantstamp audit of June 2022 identified relevant warnings that the team did not fully address, and the critical buggy code was introduced after the audit scope was established. Given the total loss of TVL, ongoing regulatory and legal proceedings, FTC finding of deceptive security representations, and the protocol's practical inactivity since late 2022, Nomad is not a viable or safe platform for any user funds as of the date of this report.","heading":"Risk Assessment","sources":[{"url":"https://www.ftc.gov/news-events/news/press-releases/2025/12/ftc-will-require-illusory-systems-return-money-stolen-hackers-implement-information-security-program","name":"","type":"other","credibility":3},{"url":"https://medium.com/coinmonks/nomad-bridge-two-years-after-hack-dead-in-the-water-7235bb2d68ba","name":"","type":"other","credibility":3},{"url":"https://caselaw.findlaw.com/court/us-dis-crt-d-del/116009637.html","name":"","type":"other","credibility":3},{"url":"https://www.zellic.io/blog/audit-drift/","name":"","type":"other","credibility":3}],"severity":"medium"}],"timeline":[{"date":"2021-11-10","event":"Illusory Systems, Inc. incorporated in Delaware by Pranay Mohan, James Prestwich, and Austin Liau.","source":""},{"date":"2022-05","event":"Quantstamp begins security audit of Nomad's smart contract system.","source":"","date_original":"2022-05-01"},{"date":"2022-06-09","event":"Quantstamp delivers final audit report identifying 40 issues, including input validation edge cases. Audit team notes the Nomad team misunderstood at least one flagged issue.","source":""},{"date":"2022-06-21","event":"Nomad deploys a routine upgrade to its Replica smart contract that initializes the trusted Merkle root to 0x00, introducing the critical vulnerability. The deployed code differs from the audited version.","source":""},{"date":"2022-08","event":"An initial attacker discovers the zero-root initialization bug and begins draining funds from the Nomad bridge by calling the process() function with a zero root and modified recipient addresses.","source":"","date_original":"2022-08-01"},{"date":"2022-08-02","event":"Over 300 wallet addresses join the exploit after the initial attacker's transaction calldata becomes visible on-chain. Approximately $190 million in user funds are drained in a chaotic free-for-all. CNN Business, TechCrunch, and CoinDesk report the event contemporaneously.","source":""},{"date":"2022-08-05","event":"Nomad announces a 10 percent bounty program, offering legal immunity and fund retention for any attacker returning at least 90 percent of drained assets.","source":""},{"date":"2022-08-11","event":"Coinbase publishes incident analysis estimating 88 percent of participating addresses were copycats; copycats collectively stole approximately $88 million.","source":""},{"date":"2022-08-20","event":"Over $36 million returned to Nomad's recovery address by more than 40 participating wallets — approximately 19 percent of total stolen funds.","source":""},{"date":"2022-12","event":"Nomad relaunches bridge to allow users to withdraw remaining bridged assets. The relaunch attracts negligible user activity and TVL.","source":"","date_original":"2022-12-01"},{"date":"2023","event":"Class action lawsuit Singh v. Illusory Systems, Inc. et al. (1:23-cv-00183, D. Del.) filed by affected users asserting RICO and negligence claims.","source":"","date_original":"2023-01-01"},{"date":"2023-08-16","event":"Federal grand jury in the Northern District of California issues an eight-count indictment against Alexander Gurevich for his alleged role in the exploit, including wire fraud, conspiracy, and money laundering.","source":""},{"date":"2024-04-08","event":"Federal district court dismisses RICO claims and most negligence claims in Singh v. Illusory Systems; fraud claim allowed to proceed.","source":""},{"date":"2024-12","event":"United States formally requests extradition of Alexander Gurevich from Israel.","source":"","date_original":"2024-12-01"},{"date":"2025-04-19","event":"Gurevich re-enters Israel during the Passover holiday. Israeli authorities order him to appear for an extradition hearing, which he ignores.","source":""},{"date":"2025-04-30","event":"Gurevich legally changes his name to 'Alexander Block' in the Israeli Population Registry in an alleged attempt to conceal his identity.","source":""},{"date":"2025-05","event":"Israeli police arrest Alexander Gurevich at Ben-Gurion Airport while he is attempting to board a flight to Russia. Israeli authorities approve extradition to the United States.","source":"","date_original":"2025-05-01"},{"date":"2025-12-17","event":"FTC announces proposed consent order requiring Illusory Systems to repay approximately $37.5 million to affected users and implement a 10-year information security program. Federal Register notice published December 19, 2025.","source":""}],"sources_used":[{"url":"https://www.classaction.org/news/nomad-crypto-bridge-class-action-says-simple-programmer-mistake-allowed-186m-hack-in-2022","name":"","type":"other","archive_url":"http://web.archive.org/web/20260518145511/https://www.classaction.org/news/nomad-crypto-bridge-class-action-says-simple-programmer-mistake-allowed-186m-hack-in-2022","credibility":3,"archive_timestamp":"2026-05-18T14:55:11+00:00"},{"url":"https://www.zellic.io/blog/audit-drift/","name":"","type":"other","archive_url":"http://web.archive.org/web/20260503003500/https://www.zellic.io/blog/audit-drift/","credibility":3,"archive_timestamp":"2026-05-03T00:35:00+00:00"},{"url":"https://medium.com/nomad-xyz-blog/nomad-bridge-hack-root-cause-analysis-875ad2e5aacd","name":"","type":"other","archive_url":null,"credibility":3,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://www.crunchbase.com/organization/illusory-systems-inc","name":"","type":"other","archive_url":null,"credibility":3,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://www.theblock.co/post/160851/nomads-190-million-bridge-exploit-drew-hacking-feeding-frenzy-of-300-addresses","name":"","type":"other","archive_url":null,"credibility":3,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://www.coindesk.com/tech/2022/08/11/copycats-stole-88m-during-nomad-exploit-by-copying-attackers-code-coinbase","name":"","type":"other","archive_url":null,"credibility":3,"archive_timestamp":null},{"url":"https://techcrunch.com/2022/08/02/nomad-chaotic-exploit-crypto/","name":"","type":"other","archive_url":"https://web.archive.org/web/20260829142131/https://techcrunch.com/2022/08/02/nomad-chaotic-exploit-crypto/","credibility":3,"archive_timestamp":"2026-08-29T14:21:31+00:00"},{"url":"https://edition.cnn.com/2022/08/03/tech/crypto-bridge-hack-nomad","name":"","type":"other","archive_url":null,"credibility":3,"archive_timestamp":null},{"url":"https://medium.com/immunefi/hack-analysis-nomad-bridge-august-2022-5aa63d53814a","name":"","type":"other","archive_url":"http://web.archive.org/web/20251115052507/https://medium.com/immunefi/hack-analysis-nomad-bridge-august-2022-5aa63d53814a","credibility":3,"archive_timestamp":"2025-11-15T05:25:07+00:00"},{"url":"https://www.halborn.com/blog/post/explained-the-nomad-hack-august-2022","name":"","type":"other","archive_url":"http://web.archive.org/web/20260517002121/https://www.halborn.com/blog/post/explained-the-nomad-hack-august-2022","credibility":3,"archive_timestamp":"2026-05-17T00:21:21+00:00"},{"url":"https://cloud.google.com/blog/topics/threat-intelligence/dissecting-nomad-bridge-hack","name":"","type":"other","archive_url":"http://web.archive.org/web/20260806092736/https://cloud.google.com/blog/topics/threat-intelligence/dissecting-nomad-bridge-hack","credibility":3,"archive_timestamp":"2026-08-06T09:27:36+00:00"},{"url":"https://www.trmlabs.com/resources/blog/key-suspect-in-190m-nomad-bridge-exploit-extradited-to-the-united-states","name":"","type":"other","archive_url":"http://web.archive.org/web/20260609123444/https://www.trmlabs.com/resources/blog/key-suspect-in-190m-nomad-bridge-exploit-extradited-to-the-united-states","credibility":3,"archive_timestamp":"2026-06-09T12:34:44+00:00"},{"url":"https://www.coinbase.com/es-es/blog/nomad-bridge-incident-analysis","name":"","type":"other","archive_url":null,"credibility":3,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://www.cnbc.com/2022/08/05/crypto-startup-nomad-offers-10percent-bounty-after-190-million-hack.html","name":"","type":"other","archive_url":"https://web.archive.org/web/20260829145523/https://www.cnbc.com/2022/08/05/crypto-startup-nomad-offers-10percent-bounty-after-190-million-hack.html","credibility":3,"archive_timestamp":"2026-08-29T14:55:23+00:00"},{"url":"https://cryptonews.com/news/over-usd-36m-returned-nomad-bridges-fund-recovery-address.htm","name":"","type":"other","archive_url":null,"credibility":3,"archive_timestamp":null},{"url":"https://blockchain.bakermckenzie.com/2024/04/08/u-s-court-dismisses-rico-lawsuit-brought-in-connection-with-nomad-bridge-hack/","name":"","type":"other","archive_url":"http://web.archive.org/web/20260305162942/https://blockchain.bakermckenzie.com/2024/04/08/u-s-court-dismisses-rico-lawsuit-brought-in-connection-with-nomad-bridge-hack/","credibility":3,"archive_timestamp":"2026-03-05T16:29:42+00:00"},{"url":"https://www.theregister.com/2025/12/17/nomad_ftc_settlement/","name":"","type":"other","archive_url":"http://web.archive.org/web/20260221014725/https://www.theregister.com/2025/12/17/nomad_ftc_settlement/","credibility":3,"archive_timestamp":"2026-02-21T01:47:25+00:00"},{"url":"https://www.insideprivacy.com/united-states/federal-trade-commission/ftc-announces-10-year-information-security-c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